What does IBNR stand for?

IBNR stands for "Incurred But Not Reported." This term is primarily used in the context of insurance and represents the estimated liabilities for claims that have occurred but have not yet been reported to the insurance company. This concept is crucial for actuaries and insurance accountants as they need to ensure that an insurer's financial statements reflect all liabilities accurately. By estimating these unreported claims, insurance companies can make more informed decisions about reserves, pricing, and risk management.

The significance of IBNR lies in its role in providing a comprehensive view of an insurer's obligations. Without accounting for these estimated claims, an insurer's financial position could be misleading, potentially impacting its financial stability and the trust of policyholders. This highlights the importance of accurate claims estimation in the insurance industry.